The Systems Thinker Blog

What is a Process Improvement Manager and Why You Need One?

Posted byRon Carroll

It is essential that someone in your company is responsible for sales. Somebody needs to do the accounting or bookkeeping. Someone oversees hiring, customer service, and order fulfillment. No matter what industry you are in, or the size of company you have, YOU—or assigned employees—perform these and other basic business functions.

However, there is one essential job position that is rarely talked about and almost always ignored by entrepreneurs and small-business owners.

Laura’s Bad Experience

Consider this email—and cry for help—I received from a frustrated newsletter subscriber. Laura was the only person in her company to recognize this rarely thought about but important job responsibility. Could she be one of your employees?

Help is Needed for Bad Business Processes

Laura wrote:

“I can't take it anymore! Chaos, pure unadulterated chaos. You could imagine myself (with the personality of a dragon) sitting down to convince owners we have to sort out all the tasks that people do into a logical workflow!  So I created a Business Systems Department with the understanding they would know what it meant... uhmmmm no. I thought I was absolutely alone in the world until my assistant found your web site. Ahhhhh ...  there are people out there that actually think the way I do! I work for a company that is in denial. I want to work for a company that believes in having good systems. 

“I am honestly tired of trying to convince this company that they should invest in their Business Systems, Best Practices, etc. If chaos is not enough to make them reconsider, if poor employee morale is not enough to make them reconsider... Well, you can quote me as a crazy lady who thought she could make a difference and become an asset to the company because I love this crazy world of Business Systems thinking... Anyhow, sorry for the long winded email but BOY that felt good to get it off my chest!” (This was about 25% of the actual email.)

The Invisible Job

Whether you have thought about it or not, your entire business operation is carried out with the help of systems and processes that come about formally or haphazardly through the years. These business systems are the way in which work gets done, and they are the building blocks of your organization. Their effectiveness determines your profitability and success.

Your systems and processes might include lead generation, sales conversion, production, order fulfillment, customer service, accounting, purchasing, hiring, and many others unique to your company.

So, what is a business system or process? Consider this down-to-earth definition:

A business system is a “recipe” for consistently getting a predetermined and desired result. The ingredients of a good business recipe may include materials, people, data, forms, checklists, tools, equipment, software, and so forth. The precisely followed step-by-step instructions, or procedure, ensure that the expected result is achieved every single time.  Great recipes for getting routine work done in an efficient and effective way increase customer loyalty, employee performance, profitability, and growth.

 Create Favorite Business Recipes

So, who in your company is responsible for developing, monitoring, and maintaining the business processes that make your company run smoothly and profitably—even when you’re not around? Who in your company understands the underlying principles for creating effective systems and processes? Who in your company wears the hat of the “Process Improvement Manager”? Is it YOU, or someone else?

Wait, What? A Process Improvement Manager?

In a small business, the owner is the first “Systems Czar” (Philip Beyer) and usually begins documenting processes so that he or she fully understands how the business operates from start to finish.

Whether it is YOU, a manager or employee (full or part-time, and not necessarily a new hire), someone in your company needs to fill the essential role of a “Process Improvement Manager.” This person’s responsibility is to maintain efficiency and quality in the workplace. They evaluate current business practices, looking for ways to improve productivity and customer service, reduce costs, and make the best use of company resources.

Specifically, the process-improvement person develops, monitors, and elevates the performance of the company’s vital business systems and processes. Ongoing system development is the key to continuous learning, growth, and improvement of individuals and organizations.

A Process Improvement Manager is something of a “business engineer.” He or she is both logical and creative, able to identify and diagnose problems and find low-cost and innovative solutions. As you implement effective systems and processes, your company will stand out in a competitive marketplace, give customers a great buying experience, and improve operational quality and efficiency for a healthy profit margin.

Become a Business Engineer

So, What Exactly Does A Process Improvement Manager Do?

1. Develop and Reinforce “Best Practices”

While most people in a company see the business operation in terms of departments, functions, and activities, the Process Improvement Manager is focused on how efficiently and effectively the work is being completed. This person sees the details beneath the surface, where dollars are earned or lost, and operational success is determined. The Process Improvement Manager has a vested interest in:

Best practices
Cause and effect
Root-cause of problems
Performance standards and goals
Measured results and data
Employee motivation, training, teamwork, and incentives
Improvement and innovation
Getting the right people in jobs
Promoting growth and development of workers
Increasing quality and efficiency of business processes
Eliminating bottlenecks, mistakes, delay and rework
Lowering costs

 Persue Best Practices

The Process Improvement Manager is always asking “WHY?”  Why do we do this task at all? Why do we do it this way? Why are things not getting done on time? Why are there excessive mistakes or rework? Why are customers or employees unhappy?  Why are we not reaching our goals?

“A relentless barrage of ‘why’s’ is the best way to pierce the clouded veil of thinking caused by the status quo. Use it often” (Shigeo Shingo, Toyota Lean Manufacturing).

The Process Improvement Manager seeks to find the best way to get the work of the organization accomplished with the highest quality and the lowest possible cost.

(“Management is doing things right; leadership is doing the right things” — Peter Drucker, renowned business consultant and author).

2. Apply the Master Skill

"If you can't describe what you are doing as a process, you don't know what you're doing" (W. Edwards Deming, Total Quality Management).

All best-practices are arrived at by refining and improving daily operations, the company’s core business systems and processes. This is the primary focus of the Process Improvement Manager. His or her mandate is to create a smooth-running and profitable organization by taking the unwanted deviation, defects, and delay out of work processes. It is to ensure that customers are happy and desired results are consistently achieved. 

W. Edwards Deming also said, “94% of all failure is a result of the system ... not people. A manager of people needs to understand … that the performance of anyone is governed largely by the system that he works in, the responsibility of management” (Total Quality Management).

 Create Effective Business Systems

Effective business processes significantly reduce sub-standard performance, wasted resources, customer dissatisfaction, employee turnover, excessive costs, weak sales growth, inadequate cash flow, low profit margins, and daily frustration.

Your ability to create and refine the vital systems and processes of your organization is what I call the “Master Skill.” All business functions—marketing, finance, and operations—fall within the scope of this single skill mastery.

Most companies have one or two exceptional business systems that separate it from the competition. What innovative and remarkable business process makes your company stand out "like a purple cow in a field of brown cows"? (Seth Godin, Purple Cow)

(“No institution can possibly survive if it needs geniuses or supermen to [run] it. It must be organized in such a way [with effective systems and processes] as to be able to get along [with] average human beings” — Peter Drucker).


3. Recognize and Solve Problems

A two-word definition for “business” is “problem solving.” The Process Improvement Manager asks, “What problems do we need to address? What parts of our organization could improve? What obstacles do we need to overcome? What invisible termites are eating away at our customer loyalty or profit? Any core business activity that is falling short of its purpose or goals is a problem to be solved.

Business problems are usually observed up-close as mistakes, scrap or rework, delay or missed deadlines, excessive costs, and people having an unpleasant working or buying experience. Repetitive problems are made apparent by financial statements, performance reports, customer or worker feedback, and expressed complaints, frustration, or even opposing viewpoints.

Systems Thinking makes problems more transparent and solutions more obvious. A well-framed statement of the problem by the Process Improvement Manager will often provide immediate ideas for change. Data—the brutal facts—influence and direct all improvement efforts.

 Seek Ideas for Improvement

The Process Improvement Manager is always looking for the simplest and least-expensive way to solve a problem or improve a process—to take waste out of the business. Any problem-solving efforts may include prioritizing projects, budgeting for upfront costs (e.g., a new piece of equipment), and determining the ongoing operational costs of the new or improved system. It is often helpful to calculate the return on investment (ROI) by completing a cost-benefit analysis.

The Process Improvement Manager chooses the system-improvement projects that are the easiest to implement, or have the greatest financial impact, or that support company goals, or that will remove a weak-link, bottleneck, or frustration from business operations. They target a completion date and get buy-in, authorization, and financial support of decision makers before beginning a project. Focus plus prioritization equal fast results.

Care must also be taken when deploying any new system or process and training the people involved. Good preparation will reduce resistance to change. Workers who do not recognize the better way of doing things will produce a new set of problems.

(“If you want something good, you have to stop doing something bad” — Peter Drucker).

4. Encourage Learning and Growth in People

The best Process Improvement Managers are constantly learning, and they promote learning and growth in others. Whether by experience, mentors, books, performance reports, or feedback from customers or workers, they are always looking for clues, evidence, data, ideas, and strategies to get work done in a more efficient and effective way. They continually seek excellence in business operations.

Although change is constant, the Process Improvement Manager always has an eye fixed on the long-term mission and goals of the organization.

 Inspire Learning and Growth

Knowledge is fleeting unless it is incorporated into behavior, into “best practices.” It is said that knowledge is power, but the real power to improve a business only comes when knowledge is applied to a specific system or process. The Process Improvement Manager tinkers with the procedure or the system components until the people and the process are getting acceptable results. Patience and persistence through obstacles and challenges yield a big payoff.

While workers do the “cooking and serving," the Process Improvement Manager’s job is to step back, study, ponder, analyze, evaluate, plan, test, and keep improving the company’s unique and valuable business “recipes.”

(“The purpose of information is not knowledge. It is being able to take the right action” — Peter Drucker).

5. Hold Business Improvement Workshops                 

The Process Improvement Manager is on the move, working with others to elevate business operations. He or she does not try to solve every problem independently, but to become immersed in business processes, observe what is working and what is not, learn from those who have hands-on knowledge, and consider what improvements would yield better results.

The best way to benefit from the collective wisdom and experience of those involved in day-to-day operations is to “work ON the business” (Michael Gerber, “E-Myth”) in a weekly business improvement workshop.

During this one-hour meeting, the Process Improvement Manager, team leader, or other manager guides a discussion on specific business activities, systems, processes, or policies that need improvement. They whiteboard the process and consider each step along with the components or “ingredients” required for its success (e.g., materials, tools, checklists, etc.).

Hold Business Improvement Workshops

Those attending the workshop counsel together to achieve consensus on best solutions and practices. The leader reinforces the vision, strategy and goals of the organization, and gets buy-in and support for doing things in a new and better way.

Keep in mind that deployment of a changed system or process requires careful orchestration of people, resources, and timing. It is important to get a new system off to a good start.

Every little improvement uncovered in a business improvement workshop will serve to transform your company into a smooth-running, customer-pleasing, money-making business system! One-hour a week is all it takes!

(“Most discussions or decision making assume that only senior executives make decisions or that only senior executives' decisions matter. This is a dangerous mistake” — Peter Drucker).

6. Document “the Way We Do Things Here"

I repeat W. Edwards Deming: “If you can’t describe what you are doing as a process, you don’t know what you are doing.” To which Michael Gerber adds: “If it’s not in writing, it’s not a system!” (“E-Myth Revisited”).

The Process Improvement Manager oversees the documentation of core business systems and processes and keeps them updated when changes and innovation occur. His or her job is to understand and describe in writing the best way to accomplish the routine work of the organization. However, documentation must be better than just a dust-gathering operations manual.

Write Policies and Procedures

Preparing written systems and processes is the proper way to establish desirable work patterns and habits. These detailed “recipes” are of value to train new employees, and as ongoing references for experienced workers. They describe the required system components (ingredients) and the best procedure to follow.

This important “how-to” information remains constant, not haphazardly passed along by word-of-mouth or changed as people come and go from the job.

When processes are written and accessible to workers, less supervision is required. If a business is replicated or sold, documented business operations are of immense worth to those starting new.

(“Unless commitment is made [in writing], there are only promises and hopes... but no [action] plans” — (Peter Drucker).


7. Get the Right People, Leaders, and Teams

The Process Improvement Manager is not the Human-Resource Manager. However, he or she recognizes that people are the most important (and expensive) component of most business operations.

Therefore, the Process Improvement Manager is concerned with 1) how jobs are defined (job descriptions), 2) company policies that affect workers, 3) fitting the right person to the job, 4) making sure people understand their responsibilities and are properly trained, 5) establishing team leaders and teamwork for increased productivity, 6) meeting performance standards and goals, and 7) promoting accountability and work incentives. All of these items affect performance—the quality, efficiency, and cost of doing business.

Get the Right People

Though often unnoticed, workers possess a variety of experience, talent, insights, and creative ideas that are just waiting for the right opportunity to be shared. A good Process Improvement Manager cultivates relationships and is always listening for useful suggestions and bold ideas to improve business processes. They love to give credit, recognize contributions and exceptional achievement, and celebrate success. Getting thought-leaders and exemplary workers behind a new idea will encourage others to follow.

Continuous and unrelenting effort to improve systems and processes is the only way to develop excellence in people and organizations.

“Reward those who Do, Train those who Can’t, Replace those who Won’t” (Henn’s Creed). The Process Improvement Manager is interested in two major factors that affect how workers perform—Desire and Capability. They find ways to elevate both.

(“Only three things happen naturally in organizations: friction, confusion, and under-performance. Everything else requires leadership. … The key [is] to … look for people's potential and spend time developing it” — Peter Drucker).


8. Speak Numbers, the Language of Improvement

“Without data, you're just another person with an opinion” (W. Edwards Deming).

The Process Improvement Manager relies heavily on data or numbers in their pursuit of truth and best practices. Their personal success is largely determined by the company’s ability to show measurable improvement of its core business activities. Numbers are the language of improvement.

However, the daily work of the Process Improvement Manager is not just to focus on outcomes, but instead to improve the behaviors and processes that lead to better outcomes or numbers.

Many operational problems are revealed in performance reports or financial statements such as the balance sheet or the profit and loss statement. These numerical indicators will point to weak or faulty business processes.

The Process Improvement Manager is interested in common business measures, including performance standards and goals, break-even points, and the key numbers that drive the success of the organization. Knowing the sometimes-dreadful facts is essential to making effective changes.

Workers also excel when they receive frequent performance feedback, and by always knowing where they stand in relation to established goals or standards. Properly viewed, numbers provide the critical foundation for all business intelligence.

Speak Numbers, the Language of Improvement

"You cannot manage what you cannot measure" (Peter Drucker). "Anything that can be measured can be improved" (Michael Dell, Dell Computers). When performance is measured and reported, the rate of improvement accelerates" (Thomas S. Monson, business and religious leader).

The time and effort of the Process Improvement Manager is a financial investment that must have a beneficial return. This is accomplished by focusing on the systems and processes that improve the customer experience and reduce costs (waste). The larger the company, the greater the opportunity there is for financial gains.

Before beginning any improvement project, the Process Improvement Manager determines the initial cost of implementation as well as the annual recurring costs. A preliminary analysis may include a budget, expected savings or earnings, and the estimated payback period.

Owners or managers approve new projects before proceeding and receive regular status updates, especially the good news of financial gains. Well-designed and executed business systems pay for themselves many times over.

(“Leadership is defined by results not attributes. … Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve, and where they lack knowledge or information” — Peter Drucker).


9. Never Stop Improving and Innovating

Kaizen, a Japanese term for continuous improvement, is the ongoing, systematic, incremental improvement in the way things are done. It is a relentless attempt to eliminate the unnecessary business activities, delay, waste, and variation within processes that add cost without adding value. Kaizen results in improved lead-time, efficiency, quality, productivity and customer loyalty. 

Every organization has unlimited possibilities for improvements that lead to happier customers and higher profits. The Process Improvement Manager is focused on bettering people, products and processes, turning problems into opportunities, and achieving operational excellence in a never-ending quest for perfection.

Most improvements in an organization come from ongoing innovation to its internal systems and processes (e.g., reducing errors or cycle time). Some improvements are incremental—tweaking what already works. However, breakthrough improvements can dramatically elevate the customer or worker experience and reduce operational costs in a BIG WAY.

Seek Continuous Improvement

“The goals of a Process Improvement Manager are simple: 1) make things easier 2) better 3) faster and 4) cheaper” (Shigeo Shingo, pioneer of Lean Thinking). They continually ask, “How can we do this better? How can we raise the standard?”

Daily improvement is accomplished by measuring and monitoring core business activities and providing constant feedback to workers and managers. Suggestion boxes, done the right way, and business improvement workshops (discussed above), are also sources for new ideas and input from workers.

Improvement methodologies such as Six Sigma, Lean Thinking, and the Theory of Constraints provide big-league principles and strategies for even the smallest of companies (see “Four Improvements Methods You Should Know About"). Small daily improvements—hundreds each year—are the key to extraordinary long-term results.

(“Knowledge has to be improved, challenged, and increased constantly, or it vanishes. … Not to innovate is the single largest reason for the decline of existing organizations” — Peter Drucker). 


10. Inspire a Culture of Excellence

The Process Improvement Manager has great influence on the culture of the business, and culture drives results more than any other factor.

Develop a Culture of Excellence

"An organization's purpose and goals set the direction. Measures focus the energy on the outcomes. Processes create habits, and habits drive the culture. You can teach skills and concepts. You can even create momentum (and a few smiles) through inspiration. But investing in skills and inspiration is a waste of money if there are not processes to reinforce your purpose and principles. The creation and continuous refinement of work processes is a mandatory practice in the Results Rule! organization, regardless of the industry" (Randy Pennington, “Results Rule!”).

The Process Improvement Manager—owner or employee—is responsible to help the company break through to a high-performance culture, a culture of discipline, a culture of excellence. This is the natural consequence of creating effective business systems and processes. There is no other way!

 (“Culture eats strategy for breakfast” — Peter Drucker).

 Nate’s Amazing Experience

Ten years ago, a young man sat quietly in one of my workshops. He was an entry-level employee of an attending customer. Little did I know how much he was paying attention, and that he caught the vision far beyond the business owner he was working for. Years later, and unexpectedly, I received an email from Nate. In part, he wrote:

"I am now working for a fortune 1,000 company and am currently in the business intelligence sector, and I am a Business Process Engineer. I go in, evaluate, look for waste, streamline processes and identify projects. I am then tasked with implementation, setting up control reports, forecasting results, and mapping out potential financial gains. I have been in the job for four months now and things are going so well they are throwing all kinds of projects at me that span many departments. I gained trust quickly and pretty much have a free rein. I have already identified over $10 million in gains from process improvements that I am putting in place.”

The Process Improvement Manager

Nate made a career of process improvement and landed a great job with a big company. However, the principles that guide his work are much the same for companies of every size. YOU CAN AND SHOULD DO THIS FOR YOUR COMPANY! As with Nate, the payoff can be quite substantial.

Laura (quoted above) and Nate, have had very different experiences in the companies they work for. All customers and employees, including yours, have similar feelings, one way or the other. Is your company organized, systemized, smooth-running, efficient, and profitable, or is it seat-of-the-pants, frustrating to do business with, and struggling to make money? Perhaps it is in between, but could it use some improvements?

Again, Who is Your "Business Systems Czar”?

The primary purpose of a Process Improvement Manager is to help engineer a remarkable business operation. This person has proven leadership and communication skills (oral and written), is a problem-solver with sound business understanding, works well with people and teams, and is performance driven.

The Process Improvement Manager spends most of their day designing, developing, overseeing, monitoring and evaluating the systems and processes that help an organization effectively find and keep customers, run an efficient and profitable operation, and differentiate itself in a crowded marketplace. 

Workers run the systems, and systems run the business. People may come and go, but the systems and processes remain constant. (see Michael Gerber, “E-Myth Revisited”). Like a fine restaurant, the key to success is developing and executing the precise and proven “recipes.”

(Oh, and by the way, the Process Improvement Manager should also document the “recipe” for their own role and improvement activities.)


Why Should People Want to Do Business with You?

Customers and employees alike want to work for or do business with the best companies. In a competitive marketplace, expectations are rising.

“Customers … are demanding from companies in many industries a radical overhaul of business processes. Intuitive interfaces, around-the-clock availability, real-time fulfillment, personalized treatment, consistency [across locations], and zero errors—this is the world to which customers have become increasingly accustomed. It’s more than a superior user [or buying] experience, however; when companies get it right, they can also offer more competitive prices because of lower costs, better operational controls, and less risk.” (Shahar Markovitch and Paul Willmott, McKinsey & Company).

So, just like sales, accounting, and customer service—essential business functions—you also need someone to develop and refine the business processes that are humming along every day in your large or small organization.

Incremental and occasionally breakthrough improvements will dramatically increase your customer loyalty, employee performance, profitability, and growth. There is no other way!

(“The best way to predict the future is to create it” — Peter Drucker).

P.S. - Download and print this article for your reference or to give your designated Process Improvement Manager. Go through the article and highlight everything your company can and should do. (Owners of small businesses will be surprised by the possibilities.) These ten principles will get you off to a great start! (Click Here to Download Printable PDF File)

The Next Step...

Tags: Business Leader, Culture, Improvement, Business Systems, People

Business Systems: 10 Vital Things You Need to Know

Posted byRon Carroll

Recently, I visited a customer in Houston Texas who owns a chain of ten auto repair stores. By every measure, Shane has a very well-run and prosperous company. He is no longer involved in the daily routines because he has excellent and trusted managers, and first-class business operations. However, Shane wants his company to become even better; he wants to improve on his success.

Auto Repair Company with Great Business Ssystems

After visiting some of Shane’s busy stores, I was reminded of a statement made by a marketing professional a few years ago. He said:

"One of our favorite clients is an auto repair shop that regularly puts three to four competitors out of business every year. His business operations are run so flawlessly, his marketing is so compelling, and his customer satisfaction is so high, customers are irresistibly drawn in and drawn back time after time. They are helpless. In their minds (and in reality), they would be STUPID to go anywhere else to get their cars fixed" (Rick Harshaw, Monopolize Your Marketplace).

Shane was eager to refine his company's daily operations, but new to my Box Theory™ Way. As I began to explain, he had a sudden epiphany and shouted, “YOU’RE TELLING ME THAT I CAN CREATE A SCHEMATIC OF MY BUSINESS, AND LIKE MY AUTO TECHNICIANS, I CAN VIEW THE DETAILS OF MY PROCEDURES AND PROCESSES TO PINPOINT AND SOLVE PROBLEMS.” “Uh, yes,” I responded. “I suppose you could look at it that way.” He actually had a brilliant insight that I had never thought about before.

What is a Business System?

I was inspired by Shane’ observation and now want to tell you why I am such a zealot about creating carefully designed and implemented business systems and processes. I hope you too will want to develop a business model so compelling that customers would think themselves “STUPID” to go anywhere else.

Before we start, keep in mind this helpful definition:

A business system is a procedure, process, method, or course of action designed to achieve a specific and predetermined result. Like a recipe, its component parts and interrelated steps work together for a desired outcome. Creating effective business systems is the only way to attain results that are consistent, measurable, benefit customers and workers, and yield an expected profit.

We are speaking now of people systems, not mechanical or electrical systems. For example, they might include lead generation, customer service, production, order fulfillment, purchasing, inventory management, hiring, training, and many others unique to your company. These systems are the daily hum of business activities that determine the success and profitability of your company.

Good Business Systems Run By Good People


10 Things to Ponder

Will you take a moment to consider ten vital principles that may help you and your staff run a more trouble-free, results-driven, and prosperous enterprise?

  1. Good systems are needed in EVERY ORGANIZATION, including YOURS.

    Effective business systems and processes are vital to product-based, service-based, and non-profit companies of every size and in every industry. They are important to the office, the workshop, the factory or the retail store. The critical purposes of your business systems are not just to get organized or systemized, but to consistently attract and retain customers, eliminate waste and inefficiency, and set your company apart in a crowded marketplace. (The only enduring businesses are those with awesome systems and processes! How would you grade yours?)

  2. Business systems are the essential BUILDING BLOCKS of your company.

    Systems and processes are how your employees get routine work done. Unfortunately, in many small businesses, they are improvised as people come and go. Every business owner and entrepreneur can become a “business engineer,” and learn the Master Skill of developing powerful systems and processes. All business functions—marketing, finance, and operations—fall within the scope of this single skill mastery. As Michael Gerber (E-Myth) said, “the business owner must work ON the business, not just IN the business.” Whether by hands-on or overseeing others, you can work ON your business in an intelligent and systematic way by creating valuable systems that continually please customers and accomplish objectives. This is one of your key responsibilities and a best-use of your time. (Decide today to build your business on a foundation of remarkable systems and processes. There is no other way!)

    Business Systems are Your Building Blocks
  1. Cost-effective systems LOWER COSTS and enable you to give customers the BEST DEAL.

    Competition can be formidable. The customer is always looking for the “best deal,” which is sometimes the lowest price, but is always acceptable quality, promptness, value, and a good buying experience. The quality and efficiency of your business processes will largely determine your operating costs and your ability to profitably compete. You can count on exceptional business systems to give you the marketing advantage of being better, faster, cheaper and smarter than rival companies. (With regard to business processes, Quality + Speed = Low Cost. Do not forget that formula!)

  2. System building is the ART AND SCIENCE of developing “BEST PRACTICES” for your company.

    The art of system design comes from your unique vision, creative approach to problem solving, and desire to differentiate yourself in the marketplace. The science comes by applying the Law of Cause and Effect and the simple but amazing improvement methods found in Six Sigma, Lean Thinking, and The Theory of Constraints. A systemized approach to running a business includes a focus on process, system components, people, quality, speed, and measurement. (Business systems are literally the “recipes” for best practices to get work done throughout your organization.)

Creating Business Systems is Both an Art and a Science

  1. Quality systems and processes SOLVE PROBLEMS and foster a CULTURE OF EXCELLENCE.

    Systems Thinking will literally make your business transparent, allowing you to clearly see the root-cause of problems and their obvious solutions. Quickly eliminate customer complaints, operational waste, mediocre performance, worker turnover, unnecessary costs, poor cash flow, slow sales growth, small profit margins, and daily frustration. You can establish a culture of discipline and excellence with smooth-running business systems, performance feedback to workers, and the empowering motivation of accountability. (Documented business processes provide a “visual schematic” for problem solving, innovating, and creating a result-driven culture. And, it is soooo easy to do!)

  2. Good business systems turn ORDINARY PEOPLE into EXTRAORDINARY PERFORMERS.

    Established systems and processes are your most valuable business asset when they can continually produce the results you seek. People are the most important components within those working processes. As people come and go, the systems remain constant. Ordinary people can produce results far above their pay grade if they operate in well-designed and effective systems. Good business systems reduce mistakes, waste, and rework, and allow workers to capably perform higher-level tasks. (When problems do happen, blame the system before blaming people, and perhaps blame yourself for the faulty system.)

Good Business Systems Help People Perform Better

  1. Achieve CONTINUOUS IMPROVEMENT with a PROCESS IMPROVEMENT MANAGER.

    Whether it is you, a manager or employee (full or part time, and not necessarily a new hire), someone needs to wear the hat of a “Process Improvement Manager.” This person’s role within the company is to maintain efficiency and quality in the work setting. They evaluate current business practices, looking for ways to improve customer service and productivity, reduce costs, and make the best use of the business's resources. Specifically, the process improvement person will develop, refine, and monitor the performance of the company’s vital systems and processes. Ongoing system development promotes continuous learning, growth, and improvement of individuals and organizations. (Innovation at the system level drives all business progress. The primary vehicle for innovation and improvement is the weekly Business Improvement Workshop.)

  2. SYSTEMS THINKING and BUSINESS IMPROVEMENT WORKSHOPS elevate people, products, and processes.

    The Business Improvement Workshop is a one hour per week meeting focused on solving identified problems, refining business practices, and advancing the organization. This brief council meeting improves people, products and processes by encouraging critical thinking, problem solving, innovation, engagement, buy-in, and team spirit. For busy owners, the weekly workshop is an important crossroad for relationship building and steady business improvement; there is no better use of time for managers or staff. (Small weekly improvements throughout the year add up to happier customers and employees, and incrementally larger profit.)

Hold Regular Business Improvement Workshops

  1. Exceptional business systems and processes are necessary to START, GROW, FIX, REPLICATE, or RETIRE.

    Start - Effective business systems are the only way to plan, organize, and structure a new business that runs smoothly and impresses customers right from the start.

    Grow – Well-executed systems and processes provide a methodical and consistent way—the best way—to dramatically grow your business and to skillfully manage the special challenges of growth and expansion.

    Fix – Improved business systems cut the waste, inefficiencies, and fat out of your organization (e.g., mistakes, lost time, and rework). Your well-oiled and cost-efficient business operation will delight customers and employees, and put more money into the pockets of stakeholders, including YOU!

    Replicate - Once you create your moneymaking “system”—and document the successful way you do things—it is easy to franchise or replicate your business model in other market locations (especially with Box Theory™ Software).

    Retire – Become free of the daily grind. Turn your entire business into a self-running system that provides consistent results day after day, even when you’re not around. Let someone manage the business for you or sell it for top dollar. The true value and selling potential of your company is found in the maturity of its systems and processes—their ability to consistently produce desired results.

    (No matter what stage of business you are at, or what you want to do to get better, creating quality systems and processes is the only solution. There is no other way!)

  2. Effective business systems PAY FOR THEMSELVES over and over again.

    "If you need a new process and don't install it, you pay for it without getting it." (Ken Stork, former president Association of Manufacturing Excellence). Please believe me when I say, “Good Systems are worth it!” And the larger your company, the greater the potential benefit. The question is not whether you should create business systems, but what new system or process improvements will have the most immediate financial impact. YOU have your hand on the lever of cash flow and profit, so go ahead and turn it up! A small investment to upgrade your operational processes is “the gift to customers, employees, and owners that keeps on giving.” (The financial benefit of high-performance business systems far exceeds their cost of development, and the payoff is often immediate and dramatic.)

A Systematized Business is a Money Making Machine

  1. BONUS TIP: BOX THEORY™ Software will BENEFIT YOU in FOUR WAYS.

    Look, I’m not big on sales hype, but I’ve spent a lot of time and money to create a powerful software program for building remarkable business systems and processes. (It is like the QuickBooks of business systems.) This low-cost product will 1) turn you into an effective Systems Thinker and developer, 2) provide all the tools you need to accomplish this mission-critical task, 3) cut your system development time and cost in half, and 4) trust me, it will raise your business IQ by 80 points—OVERNIGHT! (Learning the Box Theory™ Way could be one of the most important decisions of your business career!)

“Systems are the Solution” (AT&T)

Shortly after returning home from my trip to Texas, I needed to get new tires on my Toyota Highlander. While waiting for the installation, I learned that Discount Tires has opened over nine-hundred stores in the United States since 1960. Now that’s a pretty impressive example of a business operation “run so flawlessly, with marketing systems so compelling, and customer satisfaction so high,” that it could be replicated—and profits multiplied—without end.

I think I would be STUPID to build a business any other way! How about you?

Business systems are the most misunderstood and undervalued tools of entrepreneurs, small-business owners, and managers. If you are not giving up close and personal attention to the processes that drive the day-in and day-out results of your company, I invite you to take the next step to learn more about this most fundamental and indispensable business activity.

Just complete the short form on this page and you’ll be on your way—no money required, nor strings attached. I promise: this eye-opening and free information will get your juices flowing. If I can help you in any way, call me on my cell phone, Ron Carroll, at 801-225-9140, or email me at BoxTheoryGold@gmail.com.

The Next Step...

Tags: Business Systems, Getting Started, Culture, Improvement, Systems Thinker

My Out-of-Body Experience at Café Zupas, a Case Study in Systems Thinking

Posted byRon Carroll

My wife and I recently stopped for lunch at Café Zupas, part of an exploding chain of “fast-casual” restaurants that started in Provo, Utah in 2004. While my wife enjoyed the tasty cuisine and carried on a one-sided conversation, I drifted into another dimension (a place familiar to the Systems Thinker) where motion slows and details become crystal clear, a place where you see things not visible to others. With the amplified power of Systems Thinking, I observed the intricate “ecosystem” of Café Zupas’ business operation.

Cafe Zupas Store Exterior

This out-of-body experience began as I read a sign on the restaurant wall that read:

“We’re obsessed with Soup, Salads, Sandwiches and Desserts. We’ve searched the world for just the right recipes, with just the right ingredients. It’s all about culture, tradition and ancestry. And it’s about artistry. Perfection is made from scratch; it’s fresh, homemade and unique. Let our passion for taste and texture be your invitation to join the Zupas obsession."

Systems Thinkers from the Get-Go

The restaurant chain was the idea of two former “software guys.”  During an interview, partner Dustin Schulties said, “Our background in software helped us in creating systems for how we order, prep and use ingredients.“

The sign on the wall also reveals that these budding restaurateurs began by “searching the world over for just the right recipes, with just the right ingredients.” The concept of recipes is profoundly important for everyone trying to start and grow a successful business enterprise, including YOU!

Each recipe they found in their search is a unique system of ingredients and instructions for preparing or processing the food. Every dish is made with exactness, and the end-result is a culinary sensation. Combined, these distinctive and exclusive recipes are the basis for a winning business model.

For example, you might enjoy a Wisconsin Cauliflower soup, a Glazed Chicken Chipotle salad, or a Turkey Spinach Artichoke sandwich. For desert, you’ll die for the Triberry Cheesecake or the Chocolate Hazelnut Crème Brûlée.

Cafe Zupas Food

What is Your Recipe for Success?

A recipe is nothing more than a formula for creating something wonderful—repeatedly—with the same customer-pleasing result. (People are lined up at Café Zupas every time we go).

I once worked with a large import retailer who did flower arranging. They had “recipes” that included specific flowers, greens, and vases organized for a certain look that customers loved. I did work for a social media company that produced Facebook posts according to a recipe that earned lots of “Likes.”

When music artists develop their own sound, and people buy their songs, they have a winning recipe that can last for decades. The same goes for movie themes such as Marvel Comics or James Bond. In our free-market system, recipes that aren’t popular, will not endure.

Recipes to Riches.jpg
Photo from "Recipe to Riches" Australian Television

 

So, maybe you don’t think that creating popular recipes applies to your business. Think again!

A local landscaper has a package deal for lawn maintenance, and he installs a water feature his customers love—both recipes. A sign maker displays her unique recipe for signage (style, color, fonts, etc.) that generates a stack of orders and referrals.

A home builder shows eight floor plans in his catalog. He keeps the best sellers, drops the slow sellers, and adds new floor-plan “recipes" each year. Like pizza toppings, or sandwich fillings, customers choose the “ingredients” they want for their new home—paint color, carpet, counter tops, and so forth.

When I was young, my family had a business that manufactured framed art. We created a design theme called “Silhouettes” that featured black trees, sail boats, or other illustrations printed on glass and set against a beautiful sunset background that was recessed in the wood picture frame. The phone rang non-stop for two years. Our retail customers couldn’t keep them in the stores. As a product, it was a winning recipe, eventually copied by some of our competitors.

Your Business is Like a Chocolate Cake

Recipes are all about your ability to create a remarkable product or service that folks will line up for.  It’s the combination of ingredients and process (e.g., message, presentation, pricing, guarantee, return merchandise policy, courtesy and knowledge of employees, store cleanliness, delivery time, and so forth) that make the recipe unique and better than your competition.

When you follow the precise instructions to make a chocolate cake, you get the same result every time. However, we probably agree that not all chocolate cakes are alike. Have you tried “Death by Chocolate” or ”Chocolate Thunder?”  A simple recipe enhancement can make all the difference.

The same holds true with your recipe for generating sales leads, hiring the best people, delivering customer service, or fulfilling orders. A little change in ingredients or procedure can give a far-superior result. 

 (And be sure to give your recipe—your exceptional business system—a great name.)

The Law of Cause and Effect

A business system or process—whether in the store, the office, or the workshop—is merely a proven recipe to get things done in a specific, pre-determined and consistent way. Systems are governed by the Law of Cause and Effect; things happen for a reason. The effect or result of a business process is determined by the ingredients used, and the procedure followed.

Correctly designed, your business systems support the mission, strategy, and goals of your organization. While people may come and go, the successful recipes you have created remain constant. Furthermore, the better your recipes, the more customer loyalty, profitability, and growth you will enjoy!

In short, your entire business is made up of systems and processes—recipes—that can be managed and improved. By applying correct principles, which include just the right ingredients and precise steps, your systems will produce desired results every time. There is no other way!

A Franchise Prototype

Your entire business is a book of recipes that people will love—OR NOT. It contains your products, services and internal systems and processes. It includes your recipes for finding exceptional people, training workers, wowing customers, attracting attention in a crowded marketplace, and so forth. It is the unique way you do things in your business operation. (I might add, Box Theory™ Software is perfectly suited to create and store all your favorite business recipes.)

Favorite Business Recipes

Cubby’s, Costa Vida, Arby’s, Subway, Studio Pizza, Smash Burger, Zaxby’s, McDonald’s, Del Taco and a dozen other fast-food restaurants are close to my home. Each developed their own recipes for remarkable business systems and processes that began as a “franchise prototype” (Michael Gerber, E-Myth Revisited).

Whether you replicate your business or not, a systemized operation will put more money in your pocket, enable others to run the company when you’re not around, and prepare you to one day sell the business for top dollar—all the things you expect from your financial investment and hard work.

What Sets Café Zupas Apart?

Let’s go back to Café Zupas. They have attractive, well-run, and efficient stores, but there is more to the story.

From their website, store signs, and printed menu, the System Thinker gets a glimpse into the underlying cause of their excellent reputation and popularity. Below are some phrases I see in their marketing copy. I have italicized elements of their strategy, business model, and distinctive recipe for success.

  • “Our delicious recipes are derived from gourmet kitchens around the world.”
  • “We begin with fresh produce; the best quality ingredients delivered to our door each morning from local suppliers.”

Cafe Zupas Ingredients

  • “We’re passionate about creating kitchen-fresh food the old-fashioned way, and we know you can taste the difference.”

  • “Join us every spring and fall as we explore the flavors of the world with our World Tour of Soup.”

  • “The complimentary chocolate-dipped strawberry we give each of our guests is our unique way of saying thank you. It's a symbol of the extra care we give to everything we do.”
Cafe Zupas Chocolate Strawberries.jpg
  • “We strive to cheerfully serve our guests in such a way they feel at home and cared for.”

  • “We love to provide a place that is fun, inviting, and unique. Our relationship with our guests, our employees, and our local suppliers is what makes Café Zupas great.”

  • As we expand with new locations every year, we stay committed to making our food the same way, offering our guests fresh, delicious, artisan meals.”

Have you thought about your offering in this kind of detail? Are you communicating it well? What is your “sensory package” to attract and retain customers—words, colors, logo, printed materials, signage, sound, touch, smell, or taste?

(My wife recently took the car for an oil change and found a silk rose left on the dashboard—an unexpected gesture from an auto repair shop.)

Do you see how every repeated thing you do is a recipe or system to get a consistently desirable result?  Café Zupas’ website, store layout, menu, and thank-you chocolate strawberry, are all elements of their business systems and processes. YOUR company should promote similar features and benefits!

A Brief Time Out

In my continued out-of-body experience, I’m hovering over my wife as she tries to engage with my empty shell. Looking around, I observe dozens of smiling patrons and engaged workers. I wonder what they are really thinking about their experience at Café Zupas. I wonder if things are as rosy as they appear.

Cafe Zupas View from Above

Clues from Customer Reviews

We have peeked into Zupas’ business strategy and their recipe for a business model, but let’s dig a little deeper to see how they are doing with their other business systems and processesthose you may have in common. Consider with me what patrons are saying online.

Cafe Zupas Customers

Most of the hundred customer reviews I read were very positive—4 to 5 star ratings. The owners should be very gratified. I have noted below some suggestions that point to the company’s business systems, followed by my comments as a Systems Thinker (italics added for emphasis).

  • “We were greeted at the door (yes, there is a greeter) as an employee passed out menus to view while waiting in line. They were very helpful in letting me know how to order and how to navigate the menu. I like the bright, customer-friendly menu. Makes it easy to read.” (Ron’s comment: A door greeter in this type of restaurant is unusual but makes the experience memorable (that little extra the company brags about). However, handing out and explaining the menu in advance also makes the line move faster, perhaps a more important reason.)

  • “I have never seen a restaurant be so stingy with portions. Geez! They get out an exact measuring device for each and every ingredient. I'm surprised they didn't weigh the salad at the end to be 100% certain it was 5.7897 ounces. They are a little short on the portion size.” (Ron’s comment: If a lot of people felt the same, I would consider adjusting my portion size and pricing. However, portion control is a significant factor in the restaurant business. Keeping servings precise and predictable makes for a predictable profit. Another customer said, “The only place I leave feeling just right after a meal.” That’s what you hope the majority of your guests will experience.)

  • “This place earns its stars from me because of its many options and great value! The other thing I appreciate about this place is its well thought out, they even have a charging station with USB inputs so you can charge your phone. WHY DONT ALL PLACES HAVE THIS!?!?" (Ron’s comment: There are lots of menu options to please everyone; unlimited food combinations from a limited number of ingredients keep customer satisfaction up and cost down; USB ports for charging show they care about the little things (like the “thank you” chocolate-covered strawberry).

Cafe Zupas Menu 

  • “This establishment said they are too busy to take a phone order, yet they have a person opening the front door for guests? They responded to my inquiry, “she is not trained for phone orders"??!!! I am now going to be too busy to give my hard-earned money for undertrained staff!!” (Ron’s comment: Never be too busy to take an order or serve a customer. Due to frustration, this customer discontinued buying catered meals for his business meetings. On the other hand, an untrained person should not take complicated phone orders. Which business system is to blame, training, scheduling staff, or something else?)

  • “They tell you, when you are through eating to just leave your dishes, they will clean it all up for you. Then they say, please no tipping. The rest rooms are very clean. Thinking of how many people are in and out of there during the lunch rush, I was impressed!” (Ron’s comment: Notice three great elements to their customer-service system—staff cleans the tables, open refusal to take tips, and very clean restrooms, even during busy hours.)

  • “The food is pretty good, but they need to work on the ordering process. You have to walk through a hurried line where every person asks you what you ordered or if you want what they have to offer.  At the end of the line there is a disorganized pile of prepared dishes and you are expected to remember the names of everything you ordered to figure out which combination of soup, salad or sandwich is yours.” (Ron’s comment: I’ve had the same difficulty. This system would be easy to improve. What would you do to make it easy for customers to recognize their order at the end of the line?)

Cafe Zupas Serving Line 

  • “I was told the corporate office ‘didn't have a phone number. Of course anyone with any sense knows that a corporate office HAS a phone number. So that means that they just don't want to speak with their ACTUAL CUSTOMERS! Ahh… that's a wonderful business model.. NOT! And.. what do you know.. . with a little bit of extra research.. I found that indeed they do have a phone number. Surprise! I posted it for others, even though they prefer to hide and remain out of touch.” (Ron’s comment: A lot of companies today make it difficult for customers to contact them; they prefer email and online methods. However, when a large company does not have a posted phone number, I often shop elsewhere to insure I can get a problem resolved if necessary. This is a company decision and a business system I think Zupas could improve upon. Some companies promote their phone number. They want to know what customers think.)

  • “I thought this place was going to be obnoxious and/or complicated on first site, but once I actually got my butt inside, and looked at the menu, it was evident that it's not that complicated, expensive, obnoxious atmosphere, or stingy on the servings. Pretty much whatever you order will be delicious and I'm a total sucker for those chocolate covered strawberries. These guys just totally nailed it. It's really different from pretty much any other place, like a combination of Pita Jungle and Panera, but way better than both combined.” (Ron’s comment: This review reflects what the owners are striving for—the kind of 5-star rating that makes us smile!)

Every customer YOU have could write reviews like those above. Your customers or clients have very specific feelings about the way you do business, about the way you treat them, and about your unique business “recipes.” Some customers don’t return, and you’ll never know why. Other customers come back often, and you should know why. To be successful, systemize every good thing you want to have happen—what you want your employees to do, what you want your customers to experience. There is no other way!

 What Employees Are Saying

Now let’s get some insight based upon what employees of Café Zupas have to say. Keep in mind that the comments made below often reflect a single store. However, when you see repeated issues, there may be a good reason to evaluate one or more business practices—your systems or processes (italics added for emphasis).

Cafe Zupas Employees

  • “Tons of coworkers all around the same age (Ron: a result of the hiring system) makes for a fun work environment (the company culture). Half off food discount. Decent pay 8.50 starting (compensation system). Before opening there is a meeting daily where you can discuss anything. It is great to keep things running smoothly (communication and business improvement system).

  • “There are a lot of nit-picky rules and checklists that, while being helpful, can sometimes limit the efficiency of the employees.” (Ron’s comment: The company uses checklists to ensure quality and consistency, which comes before efficiency if you want customers to return.)

  • “Zupas pushes customers through the line so quickly. It is ridiculous, unnecessarily fast, and not human. I remember getting so stressed and frustrated, I wanted to just walk away and never come back.” (Ron’s comment: The serving line moves fast. It is the nature of similar restaurants with high demand. This is probably why the company hands out menus at the door during busy times. Furthermore, arriving customers who see the line moving fast are less likely to go elsewhere.)
Cafe-Zupas-Line-2.jpg
  • “The training they give you (if done correctly) is awesome. It really goes in depth and will teach you good customer service skills that can be used in future jobs. You'll gain a sense of urgency and learn incredible customer service.” (Ron’s comment: From numerous employee reviews, Zupas’ training system is very thorough. The workers learn to execute with exactness.)

  • “Please update the manuals and training books. Especially keep the Line Servers updated on changes in procedures.” (Ron’s Comment: I do believe this person is a Systems Thinker. Updating processes is important, followed by updated training. Yes, it is a lot of work, but if you want a customer-pleasing, waste-removing, profit-boosting business enterprise, it is necessary, and will pay dividends. This is why franchising is so popular; successful systems and processes can be easily repeated in multiple locations.)

  • “Give raises to your Line Servers especially if they have been working for you for more than three months! It is a constant struggle to keep employees, if you paid us more, fewer people would look for another job. You demand perfection and we work so hard for just being paid minimum wage. Why not invest more money in your current employees?” (Ron’s comment: Low wages and hard work are characteristic of many fast-food restaurants. That said, turnover of people is also expensive. The media would have the public believe that a benevolent business owner could easily raise wages from say $8 to $15 per hour without consequence. However, the ability to do so actually depends on the customer’s expectation of pricing. Costs in most restaurants are roughly one-third for food, one-third for labor, and one-third for overhead (e.g. rent, insurance). The average fast-food restaurant makes about 3% net profit. While you could re-evaluate your pricing system and other business efficiencies—and a price increase might be possible—there may not be a lot of wiggle room. Too much increase could drive customers to your competitors, reduce sales volume, and send your break-even point to a later day of the month (not good). Truthfully, these young people are getting an experience with value beyond current wages that will pay off in the future.)

  • Employee comments about managers: “managers need to care more about the employees working for them; management is scattered and unorganized; the upper management dress so sloppy it is embarrassing; secretive meetings are held among managers, leaving lots of room for gossip among staff; they need more open communication and transparency; managers tell you there are opportunities to advance, but they will never give you a raise or any benefit.” (Ron’s comment: Managers’ style and skills will vary from store to store. I assume the Zupas’ training system includes managers. Poor management can be costly to a company—frustration, low morale, high turnover. Remember, employees are customers, too (see Five Customer Types). If this was my business, I may try a web-based system where employees can rate their managers and overall work experience with 1-5 stars regarding a variety of topics. I would then use the information in training to help managers improve.  How would you, or do you, ensure first-rate managers in your business?)

  • "I have never worked for such a wonderful company. Every member of corporate cares and they keep people focused on the right things in the restaurant, training, consistency in the food and a fun, friendly, and clean restaurant. Keep up the great work!" (Ron’s comment: One of many 5-star ratings.)

Do YOUR employees enjoy coming to work or do they dread the thought? Do managers or workers experience frequent frustration?  Are some, even now, looking for another job? As previously mentioned, it’s not easy to keep people happy, but you can develop enthusiasm, productivity, and loyalty by incorporating the right principles into your business systems and processes (see eCourse).

Cafe-Zupas-Manager.jpg

The Takeaway

So what do we learn from Café Zupas that can be applied to your business operation. Here are a few ideas:

  1. Every business has an ecosystem that supports the life and success of the enterprise. Is your ecosystem like Earth or like Mars?

  2. Your business as a whole is a recipe, a “franchise prototype” as Michael Gerber refers to it (E-Myth Revisited). Have you learned the Master Skill for creating a winning business model that works well even when you’re not around, or that can be replicated in other markets?

  3. Every business has “recipes”—systems and processes—for pleasing customers and delivering products and services. Those recipes can be unique, wonderful, and attention-getting, or they can be lackluster, commonplace, and uninspiring. Do you have a world-class recipe for attracting new customers, hiring the best people, or providing “killer customer care”?

  4. What is your “sensory package” to draw people like a magnet? What would patrons say about the look and feel of your operation? Is it inviting, clean, and organized? Does it shine? What are you doing to WOW customers? What is your unique business advantage and value proposition? Do your customers know it? Is there a buzz in the marketplace about your company?

  5. Are the ingredients—the component parts—of your recipes the best you can make them? Many businesses have missing or poor-quality ingredients (e.g., forms, checklists, ad copy, signage, websites, software, equipment, people, and so forth).

  6. In today’s business environment, many companies are rated online. The brutal facts are in plain sight. Out of curiosity, how many items do YOU buy that are 3 stars? A 4-star rating is pretty much my bottom; 4 1/2 to 5 stars is preferred. I care about what other customers say, especially if there is a pattern. What could I read online about your business? Are you using the feedback to drill-down on faulty busy systems and processes and make the necessary course corrections?

  7. If business processes frustrate customers or employees, they will eventually go somewhere else. Improve your processes if you can. If you can’t change some of the things you are doing, listen and carefully explain the reasons why (e.g., compensation limits, work schedules, product return policies). Invite suggestions, and treat people with respect. Knowing that you value their opinion is 90% of the battle.

  8. The business culture you create is significant. Business guru Peter Drucker said that “culture trumps strategy every time. Is your business culture helping you succeed?

  9. Some little things that matter a lot: Keep the restrooms clean. Make payroll on time. Recognize and reward value given. Keep promises. Resolve problems quickly. Offer good training. Listen to your customers, including employees. Manage by the numbers. Lead with humility, respect and kindness (You could name others).

  10. System Thinking raises the details of your business operation from the sub-conscience to the conscious, making problems crystal clear and solutions apparent. Once you go there, you will never go back. Attention to details and low-cost improvements can make your business remarkable.

Return to the Present

“Ron, are you listening to me. Have you heard a word I’ve said,” my beautiful, sweet, awesome companion blurts out while waving her hand to get my attention? 

"Oh, sure, honey,” I instinctively reply as I do a soft landing back to reality. “I was just thinking about…. Oh, never mind."

 

Afterthought: Just before posting this article (10/5/2015), I googled Café Zupas. To my surprise, a Zupas display ad appeared on the top-right with a 3.2-stars rating from 16 reviews. Three visible reviews said:

"I use to love Zupas but now I feel like I am paying for barely any food."
"I ordered two (full) BBQ chicken salads today it was terrible!"
"I ended up getting two half salads with nothing but lettuce and sauce."

Oopsie! Could this be the sign of a system breakdown (at least at one store)? Trust me. It can happen to anyone—even YOU (Learn how to fix a system breakdown, and 10 reasons why business systems fail).

 

The Next Step...

Tags: Systems Thinker, Business Systems, Culture, Customer Retention

Customer Care: A Business System I'm Rather Proud Of

Posted byRon Carroll

As most of you know, I once had an accounting practice that also specialized in business coaching. As my interest grew in business systems and processes, I began to apply the principles to my own organization—Carroll and Company. Even I, your humble Systems Thinker, was impressed as I recently read some of the things we did back then to deliver first-rate customer service.

Below is an overview document written in 2004 describing our business system for providing “killer-customer-care.” It may be a little outdated, but good customer service is based upon true and enduring principles, so adapt it to your modern-day methods and technologies. (Also, please forgive my frequent use of the term “she.” Our receptionist and customer-care person was female, so I wasn’t as gender-neutral as I would be if writing today.)

Keep in mind, this system overview refers to a number of other component documents that were an important part of our customer-care system. (Component documents, like those italicized below, are now an integral part of creating systems and processes using Box Theory™ Software.

This article is a little longer than usual, and probably more information than you need. However, it contains many useful ideas; even one could lead to an important improvement for your business. More than anything, I hope it gives you a vision of what goes into creating a high-performance business system. If you give your customer-service system the attention it deserves, (not like the cartoon below), your company can become remarkable. Enjoy!

Bad Customer Service
Photo credit: Wordpress.com

 

Carroll and Company Customer-Care System Overview

The Customer Advocate

The Customer Advocate is a Carroll and Company employee assigned to view all customer contacts and customer-care activities from the customer’s point of view. This person continually assists customers, monitors the customer experience, reports problems to management, and recommends ways of improving customer care. 

The Customer Advocate performs the duties defined in the document Customer Advocate Responsibilities. These duties include new client intake and orientation, the customer relationship management (CRM) database, customer surveys, monthly customer email contacts, the customer-care calendar and budget, and special customer events or activities.

Customer-care Contacts

A customer-care contact takes place any time a client or one of their employees enters the physical space of Carroll and Company. A customer enters the space by walking in the front door or by calling over the telephone. Whenever a customer enters this space and interacts with Carroll and Company employees, they are given utmost courtesy and prompt attention to their needs. The employee “puts on their best face” as described in the killer-customer-care philosophy.

While on duty, the Customer Advocate/receptionist for Carroll and Company has stewardship for all customer contacts that take place. The person is sensitive to customer comfort, waiting times, fulfillment of commitments, and meeting or exceeding customer expectations. 

All management and staff employees practice the killer-customer-care philosophy during any engagement with clients, including those at the client’s workplace. All outgoing email communications from Carroll and Company use the prescribed logo and signature. Email communications are always courteous and professional (see document Email Etiquette). 

The Carroll and Company Customer-Care System includes the following guidelines. 

Carroll And Company “Sensation”

When clients visit Carroll and Company, they will have an overall feeling or “sensation” about the experience. Our goal is to make the experience as pleasant as possible. This begins with a clean and organized office. The temperature is set at a comfortable level (70-74 degrees). The person is greeted with a smile, addressed by their first name, and quickly served in a polite and professional manner. The client leaves Carroll and Company feeling that they accomplished their purpose. Sometimes they leave thinking, “WOW!”

Client Visits

When a client or their employee enters the reception area of Carroll and Company, they get immediate attention. If the receptionist is on the phone, she motions the person to have a seat. Addressing the client by name—when possible—she seeks to know who they have an appointment with, or what they have come to drop off or pick up. (By asking, “Do you have an appointment?” customers are trained to prearrange their visits to the office.) The receptionist immediately notifies the appropriate manager or staff that the client has arrived. If not already sitting, she invites the guest to take a seat and offers them a bottle of water. Wrapped candies also fill a bowl on the waiting-room table.

The receptionist continues to monitor people in the waiting area and strives to be interested and helpful, chatting with them if they would like to talk. The receptionist may also conduct a brief Client Survey (see below) while the customer is waiting.

The receptionist is sensitive to the length of time the client has been waiting. Response from Carroll managers or staff should be prompt, no more than three to five minutes. The receptionist contacts the Carroll employee if their response time is longer and informs the waiting person what they can expect. Most meetings with clients should take place in the conference rooms. Clients are discouraged from going into other parts of the building. Conference rooms are scheduled when possible.

Client Inbound Calls

When customers call the office, they are greeted by a smile (even though they can’t see it) and the statement “Good Morning, Carroll and Company, this is [Mary].” During the conversation, the greeter finds out the first name of the caller and the company they represent. The greeter also gets the phone number if the person wishes to be called back.

The receptionist/greeter works for the caller until his or her needs are met. She listens, takes action, and follows up as necessary to ensure the caller has a positive experience. The receptionist’s duty ends only when a call is successfully transferred, the customer leaves a voice mail, or the customer chooses to call back later.

If the client wants to be called later by a manager or staff, or if the call is urgent, the receptionist gives a detailed post-it to the manager or staff upon their return. If the client needs to be reached immediately, the receptionist should facilitate a mobile-phone contact.

The receptionist monitors a caller who is on hold and speaks with them every thirty seconds until the call is taken by staff. If the customer is anxious or frustrated, they are assisted in every way to resolve their problem. The Carroll and Company on-hold music/information/light advertising CD should be checked daily to make sure it is working properly. The receptionist also monitors and updates the after-hours voice message.

Customer Service - Gandhi Quote
View 50 more enlightening customer-service quotes


Remember: exceptional customer service is everyone’s job. Make a good impression. You may be the first and only contact a caller has with our company. Their feelings about the experience will stay with them long after the call is completed. Use phrases such as “please” and “thank you.” Apply the Golden Rule to treat them the way you would like to be treated. Keep your promises. If you say you are going to call them back within a certain time, do it! Every contact strengthens or weakens the customer relationship.

All telephone activities should follow the guidelines contained in the document Telephone Etiquette, and in the section “Put on Your Best Face” in the killer-customer-care philosophy.

Finally, receptionists/greeters are trained to excel at telephone etiquette. They should take phone calls most of the time. However, all employees should have should have basic customer-service and telephone-etiquette skills. Every person who has contact with clients represents Carroll and Company, their team, and themselves. Let’s be at our very best!

Internal Communication and Commitments

Clients must receive excellent customer care at all times during the day. Because some part-time employees come and go from Carroll and Company, it is extremely important that there is good communication at every level. This is particularly consequential when commitments made to the client must be filled by another employee.

Employees check-in with the receptionist when they arrive for work. They check-out when they depart the building. This lets the receptionist know who is available to work with customers. When employees leave, they also indicate the next time they will be back in the office. If it is anticipated that the client will have any needs while the employee is away from the office, a co-worker or the receptionist is informed so that the client can continue to receive service. The coming and going of staff should not adversely affect clients, causing them to feel frustrated with their outsourced accounting solution.

New Client Intake

When a new client hires Carroll and Company, a variety of internal tasks are performed to get the client setup and ready for service. As soon as possible, the Customer Advocate completes all tasks detailed in the New Client Intake Checklist.

New Client Orientation

The Customer Advocate holds a brief 20-30-minute orientation meeting with all new clients (except payroll only clients). This is usually held in a Carroll and Company conference room at a time convenient to the client and within a week of signing the Client Agreement. The Customer Advocate follows the New Client Orientation Checklist.

Client Database and Pictures

The Customer Relations Management (CRM) software contains the records of all sales prospects and customers. Current clients should be flagged in the software in order to exclude or include them in advertising pieces. At the new client orientation meeting, relevant company and contact information is obtained using the New Client Information form. This is later entered on the CRM database along with pictures taken of managers or key employees. A primary purpose of pictures is to allow Carroll staff to become familiar with clients, and so they can address them by their first name.

Client Feedback and Surveys

It is very important for Carroll and Company employees to understand the feelings and expectations of valued clients. This is done by listening to their spontaneous remarks, complaints, or suggestions during a contact or at a monthly client meeting. It is also accomplished by asking the client through a formal feedback system such as a customer survey. Client feedback must be routinely captured, forwarded to management, analyzed, and acted upon.

The Carroll and Company Client Survey is conducted on a continuous basis—twice a year with each client. It is administered to 5% of clients per week over a twenty-week period. It can be conducted by phone, during client visits, or at monthly client meetings. Survey results, along with customer suggestions and complaints, are analyzed and discussed during weekly management meetings or at a business improvement workshop. They are also compiled in a final report at the end of the six-month survey period.

Customer Service Rating

Client Comments Request Form

It is important for Carroll and Company and our accounting teams to recognize all significant accomplishments in working with clients. This increases motivation, strengthens relationships, and creates valuable good will. Many clients have become more profitable and successful using the Carroll and Company outsourcing model. We would like to capture some of those feelings as written testimonials.

To make this a simple task, we have created the Client Comments Request Form that lists common phrases used by our clients in the past. Clients can check any that represent their feelings and add comments if they desire. We will write a brief statement that reflects their thoughts and seek permission to use the statement in our sales process. 

The best time to get a testimonial is:

  • After a successful business evaluation
  • After early success in getting the company financially on track
  • After a major financial turn-around
  • After a significant year of profitability
  • After a single important financial accomplishment
  • Anytime an owner speaks verbal praises of the company, accounting team, or service

As a “Thank You,” Carroll and Company provides the client two $20 gift certificates for dinner at the Outback Steakhouse.

Website and Newsletter

Carroll and Company provides valuable information to customers through a monthly newsletter called Profitable Times. This newsletter is designed for busy entrepreneurs who need timely and specific information to manage their company more effectively and profitably. The newsletter offers advice from industry experts in accounting, tax, personal financial planning, sales and marketing, customer service, and human resource. The Profitable Times Newsletter is distributed the middle Tuesday of each month to clients and prospects of Carroll and Company. All articles are archived for future reference in the website Library. The Customer Advocate manages the subscription list.

Client Email Contacts

Carroll and Company maintains a Customer Email Distribution List in Microsoft Outlook and sends a general email to all clients and their key employees once or twice a month. This email may include a thought-of-the-day, tax deposit dates, office close dates, client promotions, or other useful information. The email uses Carroll and Company authorized logos and artwork and is approved by Ron prior to sending.

Client “WOW” Activities

Carroll and Company has a limited budget for doing special activities to “surprise and delight” clients. These activities may recognize an important accomplishment of the client, or they may be general activities targeted to all clients. Events or activities could include sponsoring a client’s office pizza party, giving away a free business book, having a summer picnic, or taking clients to a seminar. These “WOW” activities are targeted to an approved list of clients. Creative ideas are welcomed.

WOW Customers

Customer-care Calendar and Budget

Carroll and Company produces a Three-Month Calendar of employee events, customer care, and marketing activities. The Customer Advocate is responsible for updating the company calendar with all scheduled customer-care activities. They include client surveys, WOW activities, new client orientations, monthly customer emails, birthday wishes, and so forth. Calendar activities for each quarter are completed two weeks prior to the end of the current quarter. A budget is also submitted to fund the proposed activities.

Client Nurturing Activities

CFOs and controllers are encouraged to develop friendships with their clients by taking them to lunch, playing golf, or other relationship-building activities. Because of the cost and time involved, nurturing activities should be occasional and serve a specific purpose. These activities are at the discretion of the manager and require a personal, out-of-pocket expense.

Customer-care Training and System Improvement

At Carroll and Company, customer care is everyone’s job, regardless of other responsibilities. All employees should seek to create a company culture committed to the sincere caring, guidance, and protection of our clients. To achieve end-to-end killer-customer-care requires teamwork and shared goals, which means all business systems and incentives must reward customer care and never conflict with it.

The principles of remarkable customer service are taught at new employee orientations, weekly management meetings, team meetings, business improvement workshops, and through customer-care stories (see below). Killer-customer-care must be talked about often. Client Survey results are shared. Success and horror stories are told. Information is analyzed, and improvements are made to the customer-care system.

Email Stories to Staff

The Customer Advocate and receptionist monitor customer experiences at all times. Once a week, the Customer Advocate emails to all employees of Carroll and Company a customer experience story. The story can be a success story, or it can be an experience to learn from. The purpose of these stories is to teach the principles of killer-customer-care and to remind employees that customer care is everyone’s job.

Monthly Client Meetings

The monthly client meeting and delivery of the Profit Acceleration System™ is the most important face-to-face contact with the client. An outstanding and productive meeting is killer-customer-care at its best. The customer binder, with vision statement, business blueprint, monthly agendas, financial summaries, analysis and forecasting, and goal sheet, should WOW the customer every time. This is what separates us from the competition and is at the heart of the Carroll and Company Customer-Care System.

Well, That’s It

I’m exhausted just thinking about this business system, and the work it took to get it going. Retirement feels pretty good right about now.

However, you should know this: it took me several weeks of full-time work—free from distraction—to develop this system and all the component documents that were mentioned in italics. Once going—and a few kinks worked out—the system ran on auto-pilot, and a lot of great things happened with our clients and our employees. (Completing this system also moved me one more step toward retirement.)

You may have a different type of business, or this may be more than you want to tackle right now. But, remember this: 1) customer care is everyone’s job and essential to having a culture of excellence, 2) customer service must be systemized to consistently meet and exceed customer expectations, and 3) customer feedback is the key to achieving continuous improvement.

Your answer to three questions will determine if you are on track. Are your customers loyal? Do they refer others? Would you be a satisfied customer of your own company?

And one last thing, I didn’t have Box Theory™ Software back then. Now, I could create this business system in half the time. Your cost savings with this tool will be more than good. However, the amazing skill you learn will be even better, and the remarkable business you become will make you the best in your target market! So, don’t wait any longer. Get going today.

Footnote:

Consider the following terms (italicized above) as you contemplate your new and improved customer-care system:

Killer-customer-care philosophy and business system
Customer advocate
The customer contact
The customer sensation
New customer orientation
Customer intake
WOW Activities
Customer-care calendar and budget
Customer feedback/survey
Customer testimonials
Monthly newsletter or email communications
Business Improvement workshop for customer care

Related Articles:

Create a Symphony of Business Systems to Delight Customers!
The Business System that can Make or Break a Company!
Voice of the Customer: Four Things That Will Earn You an “A”!
How To Become the "Best Deal" for Your Target Customer!
Customer Service: Best Practices for an Awesome Customer Care System (slideshow)!

 

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Tags: Business Systems, Culture, Customer Retention, System Example

Business Leadership: Six Ways to Increase Worker Desire and Capability

Posted byRon Carroll

Are you a leader? Do you have enough “juice” to accomplish important things through other people?

Leadership is not about who we say we are. It’s not about who we want to be. It’s not a popularity contest. It’s not about our position as owner or manager, or about the title on our business card. It’s none of these things.

“Leadership is . . . about impact, influence and inspiration. Impact involves getting results, influence is about spreading the passion you have for your work, and you have to inspire team-mates and customers. . . . Leadership is to derive power . . . not from your position but from your competence, effectiveness, relationships, excellence, innovation and ethics” (Robin S. Sharma, best-selling author on leadership).

Leadership is about creating a vision, influencing attitudes and behaviors, building capability, and moving people enthusiastically toward worthy goals.

In business, it’s all about our power to develop people, products, and processes that give customers what they want, retain the best employees, produce a healthy profit, and grow a lasting enterprise.

More specifically, our role is to establish clear, compelling and frequently measured objectives, identify the vital few (see 80-20 Rule) behaviors or processes that impact those objectives, and finally, bring about the desire and capability of people to achieve those objectives.

So, how do we do that? How do we systematically create immediate, effective, and lasting change?

Consider the following six ways to elevate the desire and capability of your workforce to carry out the vital behaviors and processes of your business.

Desire and Capability

Three Ways to Increase Desire or Motivation

  1. Make it About Them – What gets you motivated? Apply the Golden Rule and provide the kind of business culture YOU would thrive in. Make work—the vital behaviors and essential processes of your operation—pleasurable, rewarding and even fun. Turn work into a game and keep score.

    Replace control with choice—even the choice to say no. Replace orders and dictates with dialog and questions. (To ask is to teach, to tell is to preach.) Replace the blaming of people with finding the root cause of negative behavior or poor performance in faulty business systems. Develop your team by giving them the freedom to fail, and the chance to learn from the things they experience.

    Compensate fairly, but remember that people work harder and even sacrifice for a cause or a vision, when they feel they are making a difference, when the mind and the heart are engaged. Focus on the personal success of your employees—learning, skill development, and career growth. (“Help thy brother’s boat across the water, and lo, thine own has reached the shore” - Scottish proverb.)

  2. Provide Social Support and Example – How do you respond to praise or criticism, acceptance or rejection, approval or disapproval? Words count, including your approval or disapproval of managers and team members. Social influence—the desire to be recognized, valued, and connected to others—has an immense persuasive power.

    Here is the best part: it only takes the presence of one capable and exemplary person on a team to significantly affect how others will act. And if that individual is willing to sacrifice personally—proving how important the task or goal is—their credibility is even greater, and others will naturally raise their game. Find your opinion leaders or exemplary workers and get them onboard with the behavior or process you are trying to implement. Remember, the power of the message is determined by the power of the messenger.

    And one more thing: when people work together, they either encourage one another, try to impress one another, or even compete with one another, all of which improve performance. Once employees hold each other accountable for following vital behaviors or business processes, you’ve got incredible social support and a motivated team.

  3. Boost Enthusiasm with Incentives – Would well-deserved incentives, rewards, or recognition get you motivated? I think so. However, incentives are effective only after you have succeeded with personal motivation and social support (the first two above). Incentives do not work if people don’t want to do the work or don’t see the value of doing it. In addition, rewards don’t improve performance very much if people already like what they are doing and are doing it well (they are self-motivated).

    Tie rewards to the desired behaviors and results you want repeated. Make sure they are given quickly, and that they are appreciated. (Christmas bonuses are not a good way to reward people; if they are smaller than previous years, negative feelings often result.)

    Keep in mind that symbolic incentives or rewards are often more important than the actual face value (e.g., Employee-of-the-Month plaque; a personal note of appreciation).

    (I once got my young children to perform chores and other work tasks during the summer months by presenting them with colorful beads at a morning recognition ceremony for accomplishments the prior day. The coveted “good-deed bead” was given for performing a kind act. This amazing and highly effective reward system came from my experience with the Boy Scouts.)

    Reward effort and small improvements, not just big successes. Recognize behaviors that support valued processes, knowing that if you reward the actual steps people follow, results take care of themselves. And be generous with praise at all stages of progress.

Three Ways to Increase Capability

  1. Build Personal Skill and Proficiency – Do your people have the ability to do what you ask? Motivational tactics—like those described above—are futile and even cause resentment if people are not capable of performing or getting the results you expect. They must have the will and the skill. Goals have to be realistic and achievable, or you are doomed from the outset.

    The repetition of behavior or processes—with frequent feedback—builds capability and confidence. Rather than focusing on results, concentrate on developing skills and creating effective business systems and processes.

    You can help people become more skillful and productive by making complex tasks simpler, breaking big processes into several smaller processes (the Box Theory™ Way), turning vague direction into clear and specific instructions, and making distasteful or boring tasks pleasant. These strategies will cause quality and efficiency to go up, and costs to go down.

    Telling people to “suck it up," and "try harder” doesn’t work. Change the process so that people will naturally do better, and success is inevitable.

  2. Create Synergy with Teamwork – Do you believe teamwork is essential in any great business endeavor? Diverse intellects, talents, experience, and capabilities often enable a group of people to work smarter and perform better than any one person within the group. Ideas and resources are shared, and workers collaborate to help one another accomplish common goals. As in sports, put each person on the team in a position where they can add the most value. For example, the higher-skilled and more expensive accountant is probably not the right person to process accounts payable.

    As mentioned earlier, when people work together and talk about how to reach goals, improve performance, and solve problems, and when they offer encouragement and hold each other accountable, just step back and smile. You’ve got an extraordinary team that will become incrementally stronger with each passing day.

    Put capable teams into first-rate business systems and processes, and you will create a culture of excellence, where people perform to their best ability even when you’re not around.

  3. Supercharge Your Business Environment with Effective Systems and Processes – Do you provide a workplace that is conducive to high-quality and efficient work? Are you more likely to find fault with people before taking a close look at the environment or process they are working in?

    It is much easier to change business processes than it is to change people. Start looking at your work layout, distance people walk, tools, machinery and equipment, clutter, distractions, unnecessary movement, complexity, downtime and start-stop workflow (system busters). Find ways to change the physical world to support the behavior you want. For example, move the printer or buy another printer so people don’t have to walk as far. Clean up your operation and get organized so it doesn’t take as long to find things (see Lean 5S).

    Don’t merely make good behavior desirable; make it certain with well-designed business systems and processes. Ordinary people put into exceptional systems will produce extraordinary results, and at a much lower cost. With Box Theory™ Software, an $8-10/hour college student can do work worth $100 per hour, and that’s no baloney!

    Look and listen. Take notice of the physical surroundings, but also listen carefully. From a factory office I once worked in, I could accurately predict the day's production level by the pace of repeated sounds made by people and equipment. When the sound of staple guns going off or the whir of a wood moulder slowed, I walked out to take a look. Because money was coming out of my pocket, I quickly noticed when there was a disruption to productivity.

    Provide visual cues, examples, checklists, quality materials and supplies, the best tools, safety guards, and so forth. Make it not only easy to do the right thing, but almost impossible to do the wrong thing (see Poka Yoke). Put people who work on the same team in close proximity. Replace employee discretion and vague procedures with clear policies and supporting business systems. Change the subtle features within your work environment that are causing misbehavior, sputtering processes, and diminished results.

You Now Have the Juice to Make It Happen

There are a lot of ideas described above to increase employee motivation and capability. Start with what makes sense for your business—what would have the greatest impact and be the easiest to implement.

Apply as many of the six major strategies above as possible, experimenting to discover what works best within each. Diagnose the root cause of your problems carefully before prescribing a remedy (see 5-Whys Analysis). Ask what process weakness or perverse incentive is causing negative behavior or barriers to success. Observe and measure the impact or your changes, learn from the results, and keep refining to make things better.

Remember: making good things happen requires personal desire and capability. Be bold. Start applying these principles today and you will soon have the “juice” to elevate your company by providing greater value to stakeholders, customers, and employees.

 

The Next Step...

Tags: People, Improvement, Culture

Business Improvement: Turn Your Business into a Game and Keep Score!

Posted byRon Carroll

By now, you are convinced that business systems are the essential building blocks of the perfect business, one that runs itself efficiently and profitably. Getting the right people, those who are competent and motivated, adds spirit and power to your business processes. It is the combination of great people and great systems that produces great companies. When you add the elements of fun and competition—when you turn your business into a game and keep score—you will discover the grand secret to developing a truly remarkable company.

Make your business a game and keep score. 

People will actually pay for the opportunity to "work hard" when they enjoy what they are doing. Recreation and sports generate enthusiasm, energy and motivation not usually found in work-day activities. Many people feel their jobs are stressful, unrewarding, and even boring. Games are fun, engaging and fulfilling. People don't like to work. However, they do like to play and compete. So, start having some fun!

Make It a Game

Let's compare the game of football to your business. The coaches (managers) begin with a strategy for winning games. They recruit skilled players (employees) and assemble the best possible team. The coaches watch game films to learn the strengths and vulnerabilities of the competition. They create an effective game plan and practice hard to execute the plan with exactness.

Players learn the rules of the game, the field of play, and the importance of staying within set boundaries. During games, they continually have their eye on the goal and know how much time they have to reach it. Every play provides feedback that enables players and coaches to make necessary adjustments. Adversity and opposition produce even greater courage, determination and achievements.

But what would happen if there was no scoreboard? The stands would be empty. There would be no screaming fans; no one would even care. Keeping score and following player and game statistics is what generates buzz and creates wealthy sports stars.

The goal of any sport is to put more points on the board than your competition before the clock runs out. And the players' gritty determination to push the envelope of human performance gives us the amazing highlights on the evening sports news.

Scorekeeping in a positive way can help people become winners. Your employees want that opportunity. Only you can provide it!

Keep Score

Games are all about numbers! The number of yards the ball moves on a play determines if the play worked as planned, or not. The final numbers on the scoreboard reveal if a team had a successful game, and if the fans go home feeling triumphant and proud, or heads-down discouraged. Performance numbers are used to set player salaries and they determine if the managers get a new contract.

Managing by the numbers can transform teams with poor performance into fierce competitors. Analysis of individual and team scoring data leads to better results and winning seasons.

There are three types of business scorekeeping that you should pay attention to. The first includes a profit and loss statement, a balance sheet, and a statement of cash flows. These financial tools are rich with information on the health of your operation. They reveal strengths and weaknesses, performance trends, break-even points, and other intelligence for decision-making and problem-solving. They show the company's ability to generate profit and cash flow—the life blood of your business. These scorekeeping tools, referred to as lagging indicators, are primarily used by owners and managers.

The second type of scorekeeping involves measuring the results of your business systems, often referred to as leading indicators. System reports may include the number of sales leads generated by marketing campaigns, the percentage of defective products returned, the person-hours required to complete a job, the number of orders processed within a day, and so forth. Setting goals and measuring system results increases productivity and profitability. As in football, employees should receive frequent feedback regarding their individual and team performance.

The third type of scorekeeping requires a deep understanding of the key number that drive the economic engine of your company. Control of the key numbers determines the performance and growth of the business. If these one or two results are good, everything else tends to fall into place. An example in football might be the success rate of first down conversion attempts. If the team converts third-down plays to first downs at a high rate, they are moving the ball and have more opportunities to score.

Key numbers indicators (KPI) are usually expressed as ratios such as profit per "x" (profit/x). Search for the one denominator that has the most impact on the business. The obvious might be profit per product line, profit per store, profit per hour, or profit per job. However, a closer examination of what makes your company tick might reveal a better measurement such as profit per employee, profit per customer, profit per ton of finished product, profit per mile driven, and so forth.

Results to Resource Ratio

Charles Coonradt, author of The Game of Work, explains key numbers in terms of a "Results to Resource Ratio." In other words, what is being accomplished with the available resources? Managers, like coaches, are people who turn resources into results. The more efficiently they do this, the more successful they are as managers.

With the Results to Resource Ratio, results are expressed in quantifiable terms representing quantity, quality, timeliness, accuracy, profitability, and so forth. Resources include such things as time, space, equipment, inventory, or budget. In plain English, these ratios may appear as:

  • Sales dollars per square foot of floor space
  • Pounds of flour per ton of wheat processed
  • Defective units per thousand units produced
  • Average sales dollar per customer visit
  • Warranty service calls per client contract
  • Feet of wood moulded per machine hour

Focus attention on the most important results and the most expensive resources. These ratios can be used at every level of your business operations.

Manager-Coaches Drive Success

Managers are on the constant lookout for better ways to refine their business systems and add useful measures that will increase productivity. Progress is based upon the ability to improve measurement. In sports, statisticians look at new ways to measure player performance and compare output with other players.

Business and religious leader Thomas Monson teaches, "When performance is measured, performance improves. When performance is measured and reported, the rate of improvement accelerates."

Effective managers create specific, written goals. Team goals shape personal goals. Personal goals are the foundation of all achievements. Goals must answer the questions of how many (or how much), by when, and by whom. "How many" is the desired result. "By when" is the adrenaline-boosting deadline. "By whom" indicates ownership and accountability for the result.

Empower with Ownership

Ownership of a task drives personal motivation. This happens when the "right people" are allowed to choose their own rewards, set their own goals, and decide how they will accomplish those goals. Personal goals must fit within the prescribed system boundaries and be consistent with team goals. When a person chooses a goal, he or she simultaneously chooses to pay the price to attain it, and the payoff for its accomplishment.

Hire and empower self-motivated people who want to win. Tell them why the business system was created, how it works, and why it will benefit them. Enlist their knowledge, talents, energy and resources to improve the system and raise the bar on performance standards. As they achieve results, their self-esteem and sense of value to the company will grow. They will set new performance records. When they create greater value, compensate appropriately. Remember, "Winners keep track of results; losers keep track of reasons" (Charles Coonradt).

Give Frequent Feedback

Scorekeeping must be simple and objective, self-administered, and provide frequent feedback during the game. Employees should not have to depend on a supervisor to tell them how well they did. They know the score as the game progresses. The use of charts and graphs can give even more impact. Effective scorekeeping offers a comparison between current personal performance, past personal performance, and an accepted standard. If you want to improve the quality of performance of any activity, you simply increase the frequency of feedback.

Celebrate Victories

Without scorekeeping, we don't know when to celebrate. There is no end-zone dance. There is no glory! Create "games" in order to celebrate and savor the victories. Winning makes the game of work fun, brings the best out of players, and creates an extraordinarily profitable business.

In the Zone, imagine yourself as the coach of a team bound for the Super Bowl. Establish measuring systems that let you know every day how much closer you are getting to the goal. Focus your attention on the 20% of activity that produces 80% of the results. Find and work the key numbers that drive the economic engine of your business. Expect to win. Pay the price. And have fun!

One final thought: There is a very real price to pay! Read on and decide now if you are willing to pay it.

Step 10: Pay the Price  (Plus a Recommended Step 11)
Back to Table of Contents: 10 Easy Steps to Grow the Perfect Business

 

 

 

 

 

The Next Step...

Tags: Business Systems, Culture, Business Measurement

Business Improvement: Get the Right People!

Posted byRon Carroll

A business organization is a group of people brought together for the purpose of finding, serving and keeping customers. The best organizations invariably hire the best people to achieve this purpose.

In his book, Good to Great, Jim Collins writes, "Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people. GET THE RIGHT PEOPLE ON THE BUS FIRST, AND THE WRONG PEOPLE OFF THE BUS, THEN FIGURE OUT WHAT DIRECTION TO DRIVE THE COMPANY."

Get the right people on the bus

 

Who are the right people and how do you get them?

There are essentially two types of people that most entrepreneurs will hire at some time. I would characterize them as "plow horses" and "race horses." The plow horses are the people that you can count on to follow the established systems of your business. From planting to harvesting, they perform the routine work in a consistent and remarkable way.

The race horses are the leaders and innovators who set the course the company will take. They are hard charging thoroughbreds with an eye on the winner's circle. A growing business needs both types of people.

The entrepreneur often begins as a race horse with a plow attached. If he creates a successful business model and not just a job for himself, his company will grow. He will soon need to hire other people.

Plow Horses Excel At Routines

Smart business owners blueprint their business and begin establishing business systems that produce consistent and measurable results—financial systems, marking systems, customer care systems, and so forth. They understand that good systems run the business and they can hire non-expert and less expensive people to run the systems—the plow horses.

Plow horses are easy to train. You can quickly teach them to follow the rows—your documented systems and procedures. If performance is lacking, you tweak the system or replace the individual, with little effect on your business.

Without systems, you must employ higher-skilled and more expensive people. Job satisfaction also tends to be lower, resulting in costly turnover. Using business systems, plow horses are able to produce desired results every single time, even when you are not around. Your business runs profitably, efficiently, and flawlessly, all by itself!

Race Horses Get You Into the Winner’s Circle

The race horses are a special breed of people: they are executives and managers who are born to excel at anything they do. They are inspired leaders and system innovators. They are fiercely loyal, deeply committed to the company's success, and have high moral character. They focus on specifics and measured performance. They apply 80% of their effort to the 20% of tasks—customers, employees, business systems, and so forth—that accomplish the most good. Give these “finishers” something they love doing and then get out of their way.

"The right executives will do everything in their power to build a great company, not because of what they will get in terms of incentives and compensation, but because they simply cannot imagine settling for anything less. Their moral code is 'excellence for its own sake'" (Jim Collins).

Race horses cost more. They are worth it. They will do the right things and deliver the best results. Pay the most to individuals who have a proven track record doing exactly what you need done. Don't compensate to motivate the right behaviors from the wrong people. Compensate to get and keep the right people in the first place!

Finally, race horses are not always employees. They can serve on your board of directors or advisors, or they can be outsourced service providers or consultants. The entrepreneur who tries to do it alone has a fool for a boss! Don't become "the genius with a thousand helpers," because when the genius leaves, the company falters. Be smart! Surround yourself with a strong management team—with people even smarter than you!

One caution: Beware of "wild stallions." They are powerful and charismatic superstars that you may think will save the day. Often their free spirit or aggressive nature makes them difficult, unpredictable or unsuitable for your team. They are usually expensive and have personal ambitions that are not aligned with the business. They may one day become your competitor.

Hire the best

Make certain you have your people in the right job positions where they can bloom. Be sure they have a clear understanding of what you expect of them. If you need to make a change, act quickly. Letting the wrong people stay around is unfair to all the right people. You will first feel it in your gut when a change is necessary. Think to yourself: Would I hire that person again? If he or she left, would I be disappointed or relieved? Terminating employees is one of the hardest things a business owner does, but take courage and do it for the sake of the team.

Job candidates are looking for a great place to work. Like customers, they too are seeking to find the best deal. Find and keep great employees in the same way you would find and keep great customers: apply the golden rule. Treat them as you would want to be treated.

(Note -The top ten desires of employees based on needs, fears, and goals are: job security, financial security, preparing for retirement, saving for a child’s tuition, saving for a home, retiring early, making more money, furthering education outside of work, staying healthy, having more time with family (Kevin Klinvex, Hiring Great People).

Keep in mind: You always pay for the "A" employee, so hire the best. Why? The lesser cost of a "C" employee plus the hidden cost of lower performance, poor decisions, and costly mistakes is equal to or greater than the higher cost of the "A" employee. Replacing "C" employees with "A" employees is essential to the success of your business.

“A” employees are people who have a history of getting results. They aren’t afraid of accountability and scorekeeping. They are self-confident and can see how past successes can apply to new assignments, but they are also teachable and eager to learn new things. They are a good fit for your organization because their personal goals are in line with your company’s goals.

"Great companies place greater weight on character than education, skills, or experience when hiring. The reason: you can teach skills, but character, basic intelligence, work ethic, and dedication to fulfilling commitments are values that are ingrained in a person. Like a professional sports team, only the best make the annual cut, regardless of position or tenure" (Jim Collins).

Research has shown that the cost of hiring the wrong person is astronomical! Your hiring system must do a superb job at getting "the right people on the bus" the first time. The cost of turnover and low performance is always more than the cost of an effective hiring system.

Good companies have a structured, well planned "hiring system" that helps them attract and choose the best candidates. Below are some tips to get you good hires.

Prepare For the Interview

Determine the key competencies required for the job before you interview a candidate. Write a job description. Create a list of questions for the interview that are specific to that job and will help determine if the person's personality and skills are a good fit for the organization.

If possible, plan well in advance of your need. Cast a broad net in your advertising. Interview as many qualified candidates as possible. Don't rush the process and end up hiring the wrong person.

Conduct telephone interviews to screen out inappropriate candidates. Schedule your staff members who will work one-on-one with the candidate to also interview your top choices. Get their feedback.

Work the Interview

Dig deep to find out whether the candidate is more comfortable with details or the big picture. Are they a self-starter or an order-taker? Are they a plow horse or a race horse? Create questions that will give you the answers you need. Ask focused questions, and then listen carefully. Take notes. Be sure to understand what questions you are legally prevented from asking (e.g., Are you married? Do you have health problems?).

After conducting interviews, use a grid to help choose the best candidate. Simply put the names of each candidate horizontally and put the job requirements or key competencies vertically. "As a rule of thumb, entry level positions require 5-8 competencies, intermediate level 8-11, and senior level positions 10-14 competencies" (Kevin Klinvex). Rate each candidate from 1 to 5 on each of the job requirements or competencies. The person with the highest ratings, coupled with a positive gut feeling, is probably your best choice. Gut instinct alone only works 10% of the time (Kevin Klinvex). Trust in the collective judgment of all interviewers.

Set your minimum standard and don't settle for less because you will regret it. Over-recruit, over-interview, and over-hire in order to find the very best people that you are looking for. When in doubt, keep looking.

Your Most Valuable Asset

A company should limit its growth based on its ability to attract enough of the right people. Remember, "People aren't your most important asset, the right people are" (Jim Collins).

Create a vision of what your business will look like when it is finished. Have an effective system to "get the right people on the bus." Hire ordinary people with basic competencies to run your business systems and a strong management team to get you to the finish line.

In the Zone you will create your system for hiring and developing a great workforce. Great companies always have great people!  Never forget that.

Now, the magic really begins to happen as the right people come together with remarkable business systems to create a culture of discipline, enthusiasm and high-performance results. The people and systems, working in harmony, produce the sweet music of a full-piece orchestra. Read on to take the next big step!

Step 9: Turn Your Business Into a Game and Keep Score
Back to Table of Contents: 10 Easy Steps to Grow the Perfect Business

 

 

 



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Tags: Business Systems, People, Culture, Business Leader

Small Biz Owner: Do You Have a “Scarcity” or “Abundance” Mindset?

Posted byRon Carroll

During challenging economic times, it is important for most small-business owners to run a lean business operation—cost conscious and careful with financial resources. However, a mindset of “scarcity” can be harmful while a mindset of “abundance” may be just the ticket to more prosperous days. Let me explain.

Scarcity and Abundance Thinking

The Scarcity Mindset

If I have a scarcity mindset, I tend to see winners and losers. Look, there is only so much to go around, and if you get more, then I will naturally get less, right? It’s a dog-eat-dog world. By carefully holding on tight to everything I have, I will be more secure, prosperous and happy. It’s not about wishing ill-will on other people. It’s just a way of thinking to protect what I have worked so hard to earn and accumulate.

The Abundance Mindset

If I have an abundance mindset, I tend to see everything in terms of win-win. There are unlimited resources and I am genuinely happy for the success, well-being, achievements, recognition, and good fortune of other people. I love to contribute to and celebrate the accomplishments of my friends, associates, and even competitors. The better they do, the better I do. Success generates more success. In my way of thinking, there is plenty to go around. I win. You win. We all win!

The Scarcity Organization

It is very easy to get into a scarcity mindset when a business is struggling and every penny counts. The normal instinct of many owners and managers in financial stress is to cut costs to the bone. But like dieting, this can be unhealthy if taken too far. For example, cutting corners to marketing activities can create some immediate and short-term financial benefits. However, profit margins are eventually eroded by severe cuts to core business systems such as marketing, accounting, or even hiring and employee compensation.

The Abundance Organization

It is a misunderstood notion that when the rich get richer, the poor get poorer. The truth is that when the rich get richer, the poor generally get richer as well. We prosper most when we help others prosper, when everyone in our network is doing well. 

In a nearby community, a reputable fast-food restaurant stood alone with no competition. They “owned” the neighborhood. Unfortunately, the store went out of business. A mile down the road is a cluster of twelve fast-food restaurants competing side by side. The parking lots are always full, and even the weaker stores are thriving. That’s abundance thinking!

Zig Ziglar, the great motivator, taught, “You will get all you want in life if you help enough other people get what they want."

With a mindset of abundance, the business owner should always be looking for the best value he or she can get when purchasing goods and services. However, getting the most value from vendors or employees does not necessarily mean paying the lowest price, just as giving the most value to the customer does not always mean being the cheapest in the marketplace.

As my outlook matured over the years, I paid more money for fast service and superior quality rather than less money to a questionable vendor with a lower price. I paid employees above the market rate because they “made things happen” that created value in my business. I put more money into my business systems and processes because the payoff far exceeded the out-of-pocket expense.

In my former world of accounting, I often gave clients ideas that saved them thousands of dollars. I sent them new customers and even became one of their good customers myself, only to have them mumble about a few hundred dollars in accounting fees I charged. They did not put a value on the significant non-accounting elements of our relationship. They had a scarcity mindset.

Which Describes You?

Compare some characteristics of the scarcity mindset to those of an abundance mindset. How do you think about and relate to your vendors, employees, and customers?

Scarcity Abundance
Not enough resources to go around
More than enough resources to go around
I Need to win/succeed I Need to be fair/we all succeed
I have the answers We learn from each other
Relationships of suspicion/doubt Relationships of trust
Adversary Partner/Ally
Expense Investment with a return
Focus on costs/tasks Focus on results/systems and processes
Buy time/hours from people Buy desired outcomes from people
Expect minimum required performance Expect high performance
Micromanagement Stewardship
Low morale High morale
Worry/Stress/Frustration Confidence/Peace

The outcome of an abundance or value-oriented mindset is the maximum utilization and development of people. The outcome of the scarcity or cost-oriented mindset is the maximum control of people. Over the years, I have learned that I want to control business systems and processes, but I want to develop people as valuable partners.

According to Brian Tracy, business author and teacher, the Law of Abundance is this:

“We live in an abundant universe in which there is sufficient money for all who really want it and are willing to obey the laws governing its acquisition.”

Achieving the more productive mindset of abundance requires a leap of faith for many of us. It is a counter-intuitive principle. Come to think of it, isn’t this the great lesson learned by Ebenezer Scrooge? (Charles Dickens, "A Christmas Carol," 1843)

 

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Tags: General Business, Culture, Laws/Principles, Business Leader, Financial Systems

Process Improvement: The Rules of Engagement!

Posted byRon Carroll

President Woodrow Wilson said, “If you want to make enemies, try to change something.” Or it could be said, “Try to improve something,” which often has the same consequence.

Process Improvement - Change Ahead

Challenging the Status Quo

Creating a results-driven business culture—with discipline, measurement and accountability—can be a new way of doing things for many small-business owners and their employees. Care must be taken that these elements do not discourage or even become threatening. When people work together—solving problems and sharing ideas—the exchange should always be positive and motivating.

Developing or improving business systems and processes challenges the status quo. It puts the organization under a microscope and exposes ugly blemishes. It questions long established traditions. It recognizes no “sacred cows.” The only goal is to find the best way of doing something. This scrutiny sometimes makes people feel nervous, threatened, frustrated, or even angry.

When seeking truth, you must be prepared to face the brutal facts and emotions surrounding your current business practices and proposed solutions.

Look for the Best in People

Most people involved in improvement projects want to make a positive contribution and arrive at the best solutions. So be careful not to put people under the microscope or blame them for performance problems, especially in an open meeting. Instead, focus on faulty systems or processes that prevent people from doing their best.

In his book, "Results Rule!," Randy Pennington describes a Positive Performance™ management process based on the following core beliefs:

  • "Individuals need to be treated with dignity and respect.

  • Most people want to do a good job and will do so if given the opportunity and ability.

  • The leader’s job is to create the environment for employees to succeed as individuals and as a group.

  • Everyone is responsible for performing in a manner that helps the organization achieve results and build strong relationships.

  • Treating individuals responsibly means that we earn the right to expect them to act responsibly."

During brainstorming and discussion, allow open dialog, inquiry, and free expression from all participants. Say to the group, "I am open to other points of view." Then listen carefully as employees or customers contribute ideas. When you convey appreciation for shared thoughts and feelings, people are more comfortable in expressing their views. Those who are passionate about their opinions (advocates) should not be stifled if they are communicating appropriately. In the end, business owners, leaders, or voting team members make the final decision.

The process is this: Listen-Thank-Consider-Decide.

Build Trust and Hope

Ann Bruce and James Pepitone give us "12 Cornerstones for Building Trust and Hope in an Organization”:

  • Respect your followers.
  • Watch how you say things.
  • Communicate openly.
  • Listen and don’t argue.
  • Avoid zingers, digs and putdowns.
  • Point out the positive.
  • Appreciate what others have to say.
  • Acknowledge that trust is a mutual exchange.
  • Increase trust gradually.
  • Be truthful with yourself.
  • Show your human side"

I once worked with a business owner who communicated to his workers the attitude: “It’s my way or the highway.” His strong opinions shut down communication and the valuable suggestions and ideas of others.

It is best to arrive at system solutions based upon facts and not personal opinions. Be objective and unbiased; seek evidence, including business statistics, reports, surveys, and other forms of measurement. There is not a right or wrong solution until proven with results—hard data whenever possible. Listen to those with the “eyes of experience” (insiders) as well as those with the “fresh eyes of objectivity" (outsiders).

Encourage Continuous Learning and Improvement

By introducing change, you may be greeted with resistance, but more often, there is a sense of relief that improvement is coming. Don’t be afraid of change, but implement new business systems with care and patience. Your employees will appreciate it.

Remember: when you include employees in the system development process, you get greater buy-in and support.

So, get all of your people to become Systems Thinkers. Set stretch goals based on your Balanced Scorecard objectives. Aim for tangible financial results. Assign accountability. Handle conflict. Involve team members in the decision-making process. Put your faith in data.
Encourage continuous learning and improvement. Hold effective system improvement workshops. Unleash everyone’s potential. And celebrate success.

 

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Tags: Systems Thinker, Business Systems, People, Improvement, Culture

Business Measures: Make Your Business a Game and Keep Score!

Posted byRon Carroll

Combining great people with great business systems and processes will naturally produce a culture of excellence. When you add the elements of fun and friendly competition—when you turn your core business systems into a game and keep score—you will discover the grand secret for developing a truly remarkable company.

It is fascinating that people will actually pay for the privilege of working hard when they enjoy what they are doing. For example, sports and recreational activities produce levels of energy, enthusiasm, and drive not usually found during the typical business workday. Jobs are often boring, stressful, and unfulfilling. Games are fun, engaging and rewarding.

Many people don't like
the drudgery of routine work. However, they do like to play and compete. So, isn’t it time for your workers to start having some fun!

Making it a Game

Let's compare business to the game of football. The coaches (managers) must first have a vision of how to play and win games. They find talented players and assemble a skillful team. The coaches study the strengths and weaknesses of the competition. They design a strong game plan and work hard to execute their strategy with precision. (You can create a great game plan with the Organization Blueprint tool of Box Theory™ Software.)

Players (employees) must clearly understand the rules and the field of play (policies and procedures). They should know at all times where they are in relation to the goal and how much time they have to get there. Every play gives the coaches and players feedback on how best to move the ball up the field (leading indicators). Overcoming adversity and opposition produces gritty determination and ever-higher levels of achievement.

The Game of Work

But what do you think would happen if no one kept score? I'll tell you. The arena would be empty; the sport would die, and no one would care. Scoring and game statistics are what bring out the fans and create million-dollar sports heroes.

Keeping Score

The goal of most major sports is to put points on the board before the clock runs out. The effort and determination to do this is so intense that extraordinary performance and miraculous plays are regular features on the nightly sports news. Scoring is what creates winners, and everyone wants to be a winner, including your employees!

The number of yards generated by a play (system) determines if the play was successful or not. Final game scores reveal whether a team had a good game or not, and if the fans go home jubilant or dejected. Performance statistics predict future player salaries and determine if coaches are rehired.

It's all about the numbers!

When I was a young man, our family owned a manufacturing company that produced framed art and decorative accessories. We created scorecards for our production workers, and they received small bonuses each day by exceeding standard performance levels. We were blown away by the increase in output. Financial incentive, achieving personal bests, and competing with one another, dramatically raised morale, and happily boosted our company profit. (Be careful that quality doesn't suffer.)

Remember: People work harder at play than they do at work! When an organization promotes fun, employees have greater self-esteem, enthusiasm, energy, and team spirit. Their positive attitudes translate to higher productivity, more creativity and innovation, and better customer service.

"Managing by the numbers" can transform teams with poor performance into teams that run efficiently and win games. Measurement is vital to success! (see common business measures)

Make "Fun" a Business Strategy

So, let the kid out and have some fun. Turn your business systems into meaningful games and keep score. Give feedback and praise. Celebrate victories. Reward outstanding performance.

In their book, “Motivating Employees,” Ann Bruce and James Pepitone wrote:

"Top organizations such as Southwest Airlines, Ben & Jerry’s, Starbucks, Disney, Nordstrom, Wal-Mart and Microsoft use fun as an organizational strategy. These leaders have realized that when employees are having fun, they just perform better."

Related Article:
Business Leadership: Six Ways to Increase Worker Desire and Capability

 

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Tags: Business Systems, Culture, Business Measurement